25 January 2018

The Act on insurance tax is under preparation

Proposal of the Act on insurance tax, which is a part of the Governmental legislative plan for 2018, is already in inter-governmental review process.

Marianna Dávidová

Insurance tax should be considered as an indirect tax which will replace currently valid 8% insurance premium levy from non-life insurance lines of business which is according to the Ministry of Finance  considered to be unsystematical and ineffective provision with many application problems.

Based on the proposed wording the insurance tax should, however, apply not only to non-life insurance lines of business but also to life insurance lines of business providing the insured risks are located in Slovakia.

The tax rate applicable for majority of non-life insurance lines of business is proposed at 8%. As regards life insurance lines of business decreased rate amounting to 2% and 3% is proposed. Pension insurance products should be exempted from the insurance tax.

The proposed wording defines cases where besides the insurance company also the person who paid the insurance premium may be considered as a person obliged to pay insurance tax.

Tax period is proposed to be a calendar quarter and the deadline for filing of the tax return is set as the end of month following the end of the respective tax period.

Expected effective date is 1 October 2018 and based on the transitional provisions the insurance tax would be applicable in case that the insurance period began after 30 September 2018 and the insurance premium was paid or received after 30 September 2018.

We will keep you updated about the next steps of the legislative process.



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